An informed and thought-provoking analysis of what lies behind the headlines and headaches of business ethics and corporate social responsibility

Monday, April 9, 2012

Car Culture

Our blog has been a little quiet these last weeks. No, we haven’t been short on ideas to talk about. Hell no, what a stretch of events we had. The facebook IPO – what a rich field day for business ethics, to which thankfully other voices have added thoughtful reflection. Or the ongoing ‘American Idol AKA Republican Primary’-show, where even a lunatic like Mitt Romney - who as a Mormon Bishop among many other things believes in baptism of the deceased - appears the sanest option; what a rich field of exploring ethical issues in the public sphere.

Next to travelling and a busy work schedule there are a few domestic issues which have kept us busy these days. One of which was thinking about buying a car. Starting a family in North America obviously seems to equate with starting to become a car owner. In Canada, there is always the weather to blame, of course. But with public transport being what it is, trips to the supermarket, the doctor or the daycare just ultimately suggest you need a car.

Buying a car in North America exposes the potential customer to a number of issues we regularly discuss here from a more scholarly perspective. Let me throw in a couple of observations. To begin with, it is rather striking to see how fuel inefficient cars by and large still are over here. This is even more startling as most of the companies which offer cars here are multinationals which in other parts of the world are very well capable of offering fuel efficient vehicles. Be it GM through their Opel or Vauxhall brands in Europe, Ford in their German and British subsidiaries or Chrysler through their Fiat brand in Italy – they would not need to re-invent the wheel to offer cars that use significantly less than, say, 10 litres per 100kms. But you have a hard time to find these cars here, certainly in the affordable segment.

This observation in itself is worth pondering. How often do we hear, not at least from the American President, that the road to less dependency on oil is long and complicated. In fact though, in the short term, we could reduce car fuel consumption by roughly a third if only we found ways for these companies to offer in North America what they successfully sell in other parts of the world. The technology exists, its something else that prevents it from being used.

Mind you, this does not just apply to American auto makers. Checking the offerings of European car companies over here it is striking to see, that they just offer their largest, gaz guzzling versions over here. In Germany, I can buy a BMW X3 (mid size SUV) as a small Diesel (with ample performance) which just needs a little more than 5l/100km, whereas in Canada, the smallest option is a 240hp muscle man which roughly drinks double of the German option. And don’t forget we are talking about the company that prides itself on being the leader in the Dow Jones Sustainability Index for seven consecutive years!

Our readers might by now have raised the odd eyebrow about me mentioning the anathema of ‘SUV’ on an ethics blog. But yes, that’s what I am looking for. Mind you, in the beginning I just thought I might get a mid size car in the ‘wagon’ or ‘estate’ version. Like the proverbial Volkswagen Passat ‘Kombi’, in which a generation of German kids over the last decades has been raised. No such luck over here though. As soon as you are looking for a mid-size car with some trunk and loading space your only option with most manufacturers are small/mid size SUVs. Again, even if Volkswagen offers a nice Passat Wagon in Europe – here they send you towards their ‘Tiguan’ SUV which starts with the modest, baby friendly engine power of 200hp!

Pretty much all car companies now serve you an SUV-only diet if you are looking for a practical and spacious car. With some exceptions from the Far East, all the offerings are over-motorized and loaded with gadgets such as four wheel drive, monster tires and racing gear which no one will ever really make use of.

Now one can argue that companies just cater for a certain taste of consumers. But my short experience as consumer in Canada so far has shown me that there is little choice beyond just some budget utilitarian options to drive a nicely designed, luxurious, practical car that is fuel efficient. Given that all the companies I checked have those on offer in other parts of the world points the finger in another direction.

While shopping around, I took this week’s New Yorker with me and found the article on ExxonMobil’s approach to governmental relationship in a funny way elucidating. It looks to me that my experience in the showroom of car dealers is maybe more the result of years of targeted lobbying by automakers and oil companies. The reason why GM or Mercedes offer fuel efficient cars in Europe has little to do with the fact that the consumers over there are so much more enlightened. It is more the result of stricter governmental control over fleet consumptions of car manufacturers and generally higher taxed gas/petrol.

In the US – as evidenced in detail by the mentioned article - big oil&auto have been quite successful in keeping gas prices low and fuel consumption high. Even with stricter regulation around fuel consumption for cars, the exemptions for trucks have just created this loophole and in some ways motivated companies to move more of their offerings into the SUV category. All this political power of industry is nothing new though. Stan Luger has published his brilliant historical analysis years ago, and it still seems to hold true today. It is just interesting to experience what this really means for everyday life from a consumer’s perspective.

North America and its ‘Car Culture’, i.e. its total dependency on the car for normal work, family and social life is a rather bleak reality. Americans now spend an average of 100 hours a year commuting by car – more than the average two weeks of vacation for most people here. Test driving one of those over-motorized SUVs this week also elucidated the Foucaultian nature of driving over here: just playing a little with the gas nozzle gets you into speed regions far beyond the ridiculous 100km/h which represent the limit here in Canada. All that money spent on such a car – and it is just good to show you yet another barrier, another rule by which our lives are constrained, restricted and domesticated...

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Andrew Crane [L] and Dirk Matten [R]

Welcome to the Crane and Matten blog - for informed commentary and expert analysis on the everchanging world of corporate responsibility.

We are two business school professors best known for our books and research articles on business ethics and corporate citizenship. We wrote the Crane and Matten blog from 2008-2015, offering unique insight on a range of issues from across the globe.

Andrew Craneis Professor of Business and Society in the School of Management, University of Bath.

Dirk Matten is the Hewlett Packard Chair in Corporate Social Responsibility in the Schulich School of Business, York University.